happy friday, welcome to "squawk box" right here on cnbc. i'm becky quick with joe kernen and andrew ross sorkin. we're counting down to the july employment report. the nonfarm payrolls are expected to rise by 183,000, but the whisper is out there and tends to be higher than that. there are estimates of more than 200,000. this is all coming after some really strong jobs numbers that we have seen from the ism manufacturing report, from the adp report, all the indicators including the jobless claims yesterday, which don't feed into this, but every single number we have been looking at, they have all indicated higher jobs and we'll see if that holds true today with the big number. the unemployment rate is expected to tick down. average hourly wages are expected to rise by .2%, and ahead of that report, after some huge gains for the market yesterday, you're going to see the futures are indicated slightly weaker. dow futures down 4 points. s&p off by a point and a quarter. and all of this is coming again as i mentioned as we had record

start to august. yesterday, you were looking at the dow industrials, the dow transports, the s&p, the russell 2,000, all closing at record highs. and the nasdaq was at a 13-year high. meantime, take a look at the ten-year. yesterday, very interesting action here after all the strong economic numbers that we have been looking at. you saw the ten-year rising above 2.72%, climbing again today to 2.738%. what was interesting about that is while the yield was climbing, stocks were climbing too. people are looking at the good economic numbers and thinking, okay, maybe things are actually finally starting to turn. >> they kept coming, they kept -- it looked like a few -- i was wondering how the dow was going to finish as the ten-year. >> the ten-year yield was climbing through all of that. >> same thing, trying to get that $38. >> right. >> so many facebook shareholders waiting for that bad moment. >> as we mentioned, the data is coming after the markets closed at new all time highs.

the dow was up 128 points yesterday, closed to 15,628. the s&p 500 managed to add 21 points to close above 1700 for the first time ever. the dow and the s&p are up about 20% for the year. that's a phenomenal climb. it wasn't a bad day for the nasdaq either. up more than a percent to close at 13-year high of 3,675. still, a long way to go for a record in that index. but, yeah, 20% for the dow and s&p. >> i wondered if you -- 3600 on the nasdaq when we were at 1400 after we did the 5,000. that's not bad. the dow, the s&p has never been over 1700. the dow has never been over 15,627. >> wow. >> there you go. >> that's -- >> 628. i don't know what it was. >> fresh new high. >> fresh new high. >> all time fresh new high. >> let's talk about dell, the soap opera continues today. will the third time be a charm

for dell shareholders? they'll get together once again in round rock, texas, to vote on michael dell's $24.4 billion offer. but carl icahn is still leading the charge against that offer, calling it too low. icahn is now suing dell and its board to try to block changes in the offer that could impact the voting. david faber was reporting last night that the talks between michael dell and silver lake, that consortium and dell special committee continue and the focus now is on a higher bid from that group in exchange for a shift in the voting standard, the talks are said to be tenuous, but progress apparently being made. should be interesting to see what happens this morning. i should say it is also possible this is not the final episode that this vote gets pushed. i know of three people who did not get on planes last night because they were told this is not going to happen this morning. >> a big surprise if it does. >> if you don't vote at all, it

is -- >> right now, the deal is if you don't vote, that's considered a no. what michael dell wants to do is raise the bid to 1375 in exchange for the -- >> ten cents for that. what about the hanging chads. those are yes, right? >> unlikely that the board is going to go along with turning the no into a yes. >> i thought they said they wouldn't yesterday. >> they wouldn't unless the price goes higher. does the price get to 1380, $13.90, could we get to $14 or maybe you don't give more cash. maybe $13.75 is my high, best and final on the actual bid, i'll provide a new dividend, can dividend money out to shareholders early. we can do some back end deal. there is a couple of different things in play here. >> reminds me of that election.

to change the -- you don't have enough votes to change the way you count them it very -- >> i'm not disagreeing with you. the fact that they agreed to this sort of set of rules on day one kind of crazy. they were trying to -- >> they were trying to be magnanimous. >> they were trying to be such good boys. >> they must have thought -- they thought, wow, we got to -- >> i think they it is going to come along with us, we're going to be so genteel about how we're doing this and here we are. >> before the activists. >> a great deal too. >> i think michael dell's deal is the best. >> i think shareholders are getting a great deal. i'm not convinced that -- i think -- i hope that michael dell buys this thing, he can turn it into a success, i think it could be a very tough challenge. >> pcs are just not -- >> every quarter we have --

>> i don't think carl icahn's deal -- offers a better deal. it never has been for all the shares outstanding. i think his point is correct in that you can't change the rules. >> i think michael delano l kno what he's doing. >> do you think that carl icahn can make something? >> carl has no idea, i don't think. doesn't mean he's not right about things. he did inclone. you think he went and looked at the clinical trials of herbatux. how about motorola. what was his plan for smartphones. he wanted to do a -- >> dell will be a shelf itself. my wore i have if carl buys the thing, ultimately sure everybody gets the cash out, but then the

company is bankrupt in five years. >> i would agree with that. it doesn't mean that carl's point is correct. >> if i told you as a shareholder you could make more money today than the company would be bankrupt in five years, is that better than taking a slight little less with a chance that the company -- >> and the company is really successful. >> there is always two scenarios. like, eastman kodak will not go away. >> ask me in five years. i'll tell you what the right answer was. >> hewlett-packard, nobody will survive, except for apple? >> people have been changing their opinion. >> same with dell. it might end up, novell or apple? a lot of corpses that litter technology and then ibm, the main frame is dead too. look at ibm. he's good. he's smart. it is his company. he's barely 50. >> he does not want to lose this thing. >> right. i'm just saying it might not -- >> either way. >> you could see five years from now dell might be a flourishing company. you don't think so. you keep using the b word.

>> i think it could be if michael dell is in charge. >> if michael dell is in charge, i don't think it will go bankrupt. i'm saying if carl icahn runs it, his whole plan is to lever the company up so high that there could be anxiety. >> could you care less about this? you're fabulous fab. >> it is an interesting discussion. i mean -- >> bored three minutes ago. >> that's not true. >> i think i'll paint the ceiling pink. >> let's get to mary then. fabulous fab found liable in the fraud case, defrauding investors. mary thompson has the details on the trial. i wasn't surprised by the verdict. i thought he might lose simply because i think that's the way juries operate. however, i always thought this case was tenuous. >> i think, well, some people thought it was tenuous. i thought the s.e.c. thought they made a very strong case at

the end and they were somewhat surprised a verdict didn't come back sooner. the courtroom in general was surprised because they were not expecting him to be found on liable of six of seven counts, for the s.e.c., it is a big and needed victory in the case brought against the former goldman vice president in 2010. attorneys say this enhance the reputation as a watchdog and will embolden it to pursue others committed of wrongdoing. here is matthew martins after the verdict. >> we're gratified by the verdict and appreciate the jury's hard work. >> after a day and half of deliberation, they found tourre liable on six of seven counts of violating securities law. violations linked to a bet on the housing market, tourre put together for john paulusen in 2007. over the more than two-week trial, the s.e.c. referenced well publicized and personal e-mails sent to and from tourre to prove its case. the agency accusing tourre of

deliberately misleading investors by withholding information about the role paulson's firm made. paulson pocketed a billion on the bet. the other investors lost a billion. the verdict is a big a surprise to the defense who felt their clins w client was convincing on the stand. so much so they didn't call any witnesses. tourre admitted to mistakes, but said he didn't mean to confuse anyone, telling jurors he was there to clear his name and tell the truth. he showed little emotion and declined to comment after. financial penalties to be decided by the judge later while the s.e.c. will decide whether or not to impose a lifetime ban on tourre from the securities industry. as for goldman sachs who settled with the s.e.c. over this matter, it said it remains focused on being more transparent, accountable and responsive to the needs of its clients. >> do you think they should have

called witnesss? do you think this was a major mistake? >> they'll say, if you're a defense attorney, last person you want on the stand is your client in large part because you don't want anyone to come up and say he said this or she said this and then not have a chance to rebut that statement. so really, if you were watching him on the stand, he's very energetic, very likable, very smart. so i think they felt the jury would -- he would appeal to the jury and there would be -- there would be more inclined to -- >> mary, i can only say from what i saw of the video of him walking outside and in and out of court, you were there with him during a lot of those times, i was a little surprised he seemed really kind of care free about the whole thing, very relaxed, which i can understand trying to present a front of confidence, but at the same time, did he seem more remorseful or like he was taking this stuff seriously in the courtroom? i wonder what the jury read into it. >> he did have that great

energy. i don't think remorse is anything you saw from him in large part because i don't believe he did anything wrong. and so that's what he was there to tell him. after the verdict was read, he kind of -- he looked over and raised his eyebrows like that and then went out. his -- i think they feel there could be or there is a case for appeal. and that will happen once the financial penalties are decided. >> is there any knock on effects to goldman or others in this case? >> we asked martin, he declined comment at this point. as everyone pointed out, any press reports you read, it was a dark day for goldman. it prompted them to do this review, internal review. >> do we know, goldman sachs has been paying legal fees for fab out of their own pocket. >> yes. >> did they pay for an appeal too? >> i don't know that. >> in some cases you have an

insurance company that pays for everything. if you lose, you have to pay them back. >> i'm wondering if he has penalties, does goldman cover that or does he cover that out of his own pocket. >> i would assume penalties he would have to cover. in the goldman case, they do not have an insurance company. that i do know. >> self-insured. >> self-insured. >> you can imagine what our favorite -- what the huff post would do if they wanted to be reimbursed for lost legal fees since they lost. >> the nerve of the evil squid going after its poor low level employee and trying to recoup the money that it spent defending him. because i think -- >> i would think the huffington post would be thrilled about an s.e.c. victory and would want the guy to go to jail even though this is -- >> they would be mad if goldman tried to get money back. >> i'm with you. >> you are? you don't think they would think goldman, the fat cat, poor little fab, this low level -- a

lot of people are criticizing they didn't go up any higher, didn't get fab's boss. >> they treated him as -- >> if goldman, which is back to 160 goes to try and get fab, to try to get the money back from the guy who takes the fall guy for lloyd -- >> you think he should pay the penalty too? >> i think goldman just ought to keep their head down and just have this go away. it went away. it basically had gone away. now it looks like, i mean, if you can get a guilty for fab, it looks like the act itself once again -- i never thought the act -- i think if you have, you know, even gold, you can design something. i can design something thinking gold is going to go down. somebody else absolutely has the opposite reaction. >> that's making a market. what they were doing with fab was trying to prove that he was intentionally misleading people when he was selling. >> if you're wrong about what you're -- what if he had put that portfolio together two or tree years before that, with the

same stuff he thought was in there and then -- >> it doesn't matter. >> runs for another two or three years. >> what you're doing is making a market. there has to be two sides in a market. the aca, like, the journal's point is to paint them as, like, novice investors, couldn't figure out that -- >> applauding the s.e.c. >> they said they're congratulating them, they thought there was no case there in the first place. >> very bizarre thing. >> they said, congratulations, but we never thought you had anything. right. thank you. >> mary, thank you. >> sure thing. >> this was fun. >> you're going to see fat cats going after poor fab, the low level guy that took the fall. >> i'll see if i can get an answer for you. if i check my e-mails, i might have an answer now. time for the global markets

report. ross westgate is standing by in london. good morning. a lot of green arrows here. how about there? >> ahead of the employment report, slim gains today,follow ing not bad gains yesterday. we're near the best levels of the session. not huge moves too much of interest for the employment report coming out. but, they're thinking we may get a bit of numbers. ibex just up a quarter of a percent. shows you the mood really. volumes are fairly light. now, this move in the ftse despite the fact we had construction survey today. the best level for three years. another good bit of data out of the uk. couple of stocks in focus, rbs, 3.8% lower today, the majority state-owned bank confirming ross mcewan is going to replace the outgoing ceo steve hester

effective october 1st. the announcement comes as the bank went back into the black for the first time, posting a pretax profit of 1.4 billion pounds compared to 1.7 billion last year. first time in a long while they have been making profits here. but numbers are still weaker than expected. toyota doing pretty well, up 3.3%. the weaker yen helping the japanese carmaker, biggest automaker raising profit forecasts as well. now expecting to post $20 billion in operating profit for the full year. two standout corporates. we'll keep our eyes on the debt market as well. saw the spike higher in treasury yields and dragging yields higher over here in europe. 2.3%, now yielding 2.47. treasury yields at 2.73. bound yields up at 1.7. the only one outperforming is italian yields, a little lower today. 4.36%. whatever happens in treasuries

is going to have an impact around the globe. that's where we stand right now. back to you. >> ross, thank you. have a great weekend. see you next week. >> you too. when we come back, jobs and record highs for the markets. will today's jobs report spark a rally and move the taper further down the road? we'll kick off that discussion right after this. and as we head to a break, check out the surge in the dow transports. this was an unbelievable move yesterday as the dow transports are up 208 points, 3.2%, the biggest percentage gain since march of 2012.

investors were focused on the july jobs report after the fed gave few, if any clues on tapering its bond buying program earlier this week. joining us on the markets is alan gail, senior investment strategist at ridgeworth capital management. on set with us, bob costas. bob, if you look through all the numbers that we got yesterday and all this week, all the jobs numbers in particular, they have been better than expected. does that mean that you raised what you're expecting, your expectations for today's big government report or where do you stand? >> i'm looking for slightly stronger numbers. looking for private payrolls up about 230, headline number up about 220. i don't know what it is, but the ism production index tells me it

is correlated with other components in the series. production index is stronger than orders and backlogs and some of the other components in a way that it has never been before. the diversion was huge, way off the map. i don't know what it means. and it may seem like autos because we know autos didn't have a shutdown and that has something to do with jobless claims. but chicago area should be picking up auto activity, on the weaker side. so the fed regional indices were a couple of them were strong, philadelphia was very strong. new york was okay. dallas and kansas city weren't really so great, positive, but not great. so, you know, you have different measures trying to sample the same thing but use different concepts and give you different answers, it tells you the economy is irregular. i still think it is irregular. we had a strong adp report. i'm not convinced on the economy. i'm looking for a stronger

employment number. >> you look at this and the signs and try too figure out what the fed is reading, they seem to be focused on the jobs picture too. do you think this is making the case for them to taper as early as september? >> i don't know. they're focused on the job market. we had a weak revision to gdp. look at the new gdp profile, the dese desell ration is much more pronounced than it was. they kicked up growth. the quarter was stronger than expected, the desell ration on year on year growth rate is a lot more severe. if you're the fed and looking at job growth, we have 196,000 jobs over the last 12 months and the previous 12 months. the fed keeps talking about jobs accelerating. over what time horizon? jobs have been steady. now gdp is decelerating, you can't expect that job growth to continue if the economy is deted

decelerating. they did something very strange by saying their view, their expectation are different. they said now it is their view for the end of the year rather than expectation the economy will do something. i don't know how it is different to say you have a view instead of an expectation. if it is so significant, they need to change it. what does it mean? >> listen, if you mess around with the view -- >> to be an economist, you need an ph.d. in english, not in economics and you don't need math skills, you need to be able to read, though. >> we used to argue about what the meaning of is is. >> that was bill clinton. >> washington. >> as the market was moving yesterday, what struck me you watch the ten year yield push above 2.7%, and the stock market continued to climb is this an indication that good news is good news because while the gdp numbers were weak, all the economic numbers we got yesterday were stronger than expected. >> i think that's true. in managing the strategies,

we're looking at three things. just going back to the earlier -- what we're seeing is a macro climate that is improving. i would push back a blilittle b over the course of the second quarter, it is clear we saw a slowdown in shipments but started to see a pickup in new orders. i think we're poised for a better second half. i think the pickup in the ism while higher than certainly i think everybody expected in including myself, it does suggest that we're starting to get some reacceleration as we go to the second half. i think that's what the market wants to see and it is getting it. it is kind of a good news is good news and bad news is good news and that the fed may be a little tentative here in its decision to taper. i think it knows that once it makes that move, there is no going back. and so they want to make sure

they're very cautious. >> when you say you're looking at attractive entry points as a main criteria for whether you're buying or not, you have all the indices at new highs, is this an attractive level or do you get concerned here? >> we have been overweight equities all year. a better time to buy 20% ago. but i still think that the valuations are still reasonably -- still reasonable. our target for this year is 17.50. we're getting closer to that. i think that -- >> target for this year is 17.50? >> yeah. >> so if we have been -- for those listening to say, you know, should we wait for a pullback, i think a lot of people have been saying that for much of this year and if you've been waiting, you've been leaving a lot of money on the table. if you're not involved, it is appropriate to step in and put some money to work here.

>> is it fair to say, if we get less than let's say 160 today, that takes things off the table for the fed raising rates in september? >> you never say never because there is still more reports, more things that the fed has to look at. a number like that raises big question marks. we have question marks raised and we really don't know very precisely what the fed is looking at, except that the fed really, really wants to end this program. you can call that. they were talking about tapering. >> changing the parameters. >> even for economic data. the problem is you look at the statements and we used to think the statements were the template for what the fed is going to do. now it seems the fed is going to do what it is going to do and change the template to make things seem the same. the change they made about the inflation language was very telling. >> in other words, a low bar that is required for them to -- >> are you -- >> it is a mobile bar. they'll jump and then pull the bar down as they go over it. >> are you confident that the

market would sell off if it was below 160? >> i think if it is below 120. i don't know about 160. >> i'm not confident with sell off. >> they look at bad news as good news. >> let's put this market where it is has been the fed and i think we still need to go through that -- it becomes clear they'll taper, for sure. i think we still need -- >> i agree. i don't think we're through the dislocation. >> i think we still want both. i think we want it kind of strong, be nice if the participation rate started improving. >> we want a stronger economy and not -- >> i don't know. >> a guy who grew up in detroit, the dislocations, they're just starting. >> yeah, the roach motel, we checked in. i don't know if we can ever check out. i hope they have room service and have on demand for you. you know what i'm saying. >> wi-fi. >> yeah. that's right.

you don't even -- you just want free wi-fi. do you know how to hook that up to the wide screen? >> no, how do you do that? >> you're on the little thing? >> yes. >> bob, thank you for coming in today. alan, thank you. >> thank you. >> you can -- >> like a little putian. the battle with dell, shareholders gathering in texas to vote on the buyout offer. and carl icahn pushes for an alternative. we head to a break. take a look at yesterday's winners and losers.

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♪ welcome back. good morning. welcome back to "squawk box." you think tweeting is better than if i just say, wow, that cardinals/pittsburgh rivalry is heating up. what a close one yesterday. 13-0. >> tweeting is better. >> okay. let me tweet it. i'm joe kernen with becky quick and andrew ross sorkin. we're less than two hours away from the july jobs report. the consensus is 183, but it is going up because nonfarm payrolls yesterday or

unemployment claims were good. number of firms raised their forecasts. good set us up for the big everybody thinks it is one higher for the big surprise. murphy's law. who said that? blank fine, if it is going to happen -- if it is going to happen, it is going to happen. the unemployment rate expected to drop to 7.5%. automaker toyota says its profit nearly doubled from a year ago and sent an industry record. a decision delayed in a case pit ig apple against samsung. the itc is deciding whether certain devices go against apple patents. it was scheduled to issue a ruling this week but delayed the decision until next friday without a reason. let's look at the markets. the futures have been a little weaker. sitting around the flat line. at this point, dow futures up by 6 points. s&p barely budging. everybody is waiting to see what happens with the jobs number.

the s&p, the dow both closed at record levels yesterday. the nasdaq closed at a 13-year high. huge gains for the dow transports. this was pretty broad-based gains yesterday. looking at europe this morning, probably also waiting to see what happens with the u.s. jobs number here. barely budging out any of those markets. asian markets overnight, you did see some big movement when it came to japan. nikkei was up about 3.3%. that was a significant move, gain of over 460 points. oil prices this morning, right now, are down slightly, down by 9 cents. look at wti crude, 107.80, big gains over what we had seen a few months ago. the ten-year note with the market watching so closely. the yield is up once again this morning. 2.733%. you still saw some major gains from the equities market. the dollar this morning, dollar yesterday was very strong, had very good days.

a lot of that good economic news. this morning, a giveback, the euro is at 132.15. dollar stronger against the yen at 99.79. gold prices right now are down by $22. back below 1300. >> the dell soap opera continues after postponing the meeting twice, the pcmaker shareholder reconvening deciding on whether to take the company private. we'll see what ends up happening. with us to talk about more about all of this, brian white, senior analyst at topeka capital markets and from what i'm told, a surrogate for carl icahn. you like the carl icahn bid. >> i like the deal. i think this started as a chess match. and has really turned into a street brawl. you saw it this week. saw it the previous week, the back and forth, the open letters, name calling. but i think his deal is a better deal. >> you vote for his deal because? >> i vote for his deal for two reasons. number one, i'm getting $14

versus 13.65 or 13.75. >> he's going to lever that company up. as i said, might be bankrupt in five years. >> if you look at the net debt balance will be higher, but the total debt balance will not. >> you think all shareholders would actually get $14 and that deal would come through? don't have any questions about it? that was some of the concern before. >> 71% of the shares will get the 14. you get a warrant. for every four shares you give back, you get a warrant. that warrant is a $20 for seven years. this stock is now at $20 in seven years, something is wrong. you get to participate in the equity. i look at it, a recapitalization which no one thought about. michael dell and silver lake, i think, got this argument started. no one wanted to touch dell. this got down to three times x

cash. >> everybody thinks it is the prettiest girl at the party. >> you're right. michael dell showed interest in this and it caused other people to start taking a look. black rock took a look and icahn. >> everybody took a look and most of them with the exception of icahn passed. >> i think the recapitalization in carl icahn's ability to bring in a good management team is very different than anyone else can bring to the table. he wants to remove michael dell. >> you don't think dell is a good manager. as the founder, could he be someone that comes back in and breathes life into the company? >> he took the company public in 1988 at nine cents. stock has been phenomenal. the last five years down 50%. so i think the argument would be made, you know, sometimes companies change and mature and we have to move beyond our founder. >> today, if michael dell were to push his bid higher, let's say he's at 13.75 now, goes to

13.85, 13.90 even, would you be okay? at what point would you be okay with the rules changing? that's what's on the table right now. >> a lot of things on the table. that's one of them. why are we changing the rules which the game is over. that's the argument that carl icahn is making. >> different question. >> if the bid went to 13.85, would you change your vote? >> no. >> you're taking the $14 deal because it is $14, carl icahn? >> remember, when you include the warrant in this deal, this is a 15.50 to $18 deal icahn has on the table. that warrant has value. >> if the company has a future. >> if the company has a future. >> that's -- >> he's going to bring in a good manager, right, good ceo, good management team. >> is that obvious? >> i think it is. he made a billion off motorola. >> that's true. i also remember blockbuster,

which was different story. >> fair enough. >> we'll see what happens later today, if there is a vote at all. coming up, how many cars and trucks do you think auto nation sold over the years. mike jackson will tell us about reaching a new milestone as we head to break. check out the price of crude. "squawk box" is coming right back. we're all set to bundle your home and auto insurance together. i'll just press this, and you'll save on both. ding! ladies and gentlemen, boys and girls, llllet's get ready to bundlllllle... [ holding final syllable ] oh, yeah, sorry! let's get ready to bundle and save. now, that's progressive. oh, i think i broke my spleen! home insurance provided and serviced by third party insurers.

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welcome back to "squawk box." futures now indicated up a little bit. we got to overcome that fair value, up 15. we got to stay above 15 on the futures to indicate a higher opening. cars were flying off of the lot in july according to auto data sales. about 15.7 million versus 14

million a year ago. i guess that's the annual number here. the best july since 2006. auto nation is the country's largest dealer, supporting july sales numbers in a major milestone. mike jackson is chairman and ceo of auto nation. and his ridiculously high forecast, it is above that, mike. can you believe that you might be -- have been conservative with what you told us was going to happen? >> yeah, you're absolutely right. the beginning of the year, we raised a lot of eyebrows, but we bought inventory based on the selling rate and i'm glad we did. >> another brilliant management move by the guy in charge of auto nation. >> it can happen from time to time. and -- >> stocks at a new high, right? >> we retail over 25,000 units here in the month of july. that's a 17% increase over the

prior year with strength in general motors up over 20%. great strength on the west coast, up over 22%. as an indicator of how the economy is doing, our pickup truck sales were up 27%. and we also had a special occasion in the month of july in that we, as a company, retailed our 9 millionth unit, happening here this morning, at our ford store in bradenton, florida. and our customer who bought the 9 millionth is here with us this morning and all the associates to celebrate it. it is a great story, joe. it is a typical american story, buying a ford, f-150 pickup truck because his business is improving and his old truck is worn out and i have to say, gives me a little -- a lot of optimism about the future when long time customer who is 92 years old is buying a pickup truck for his business.

and he financed it, we arranged the financing for it. as celebration of our 9 millionth sale this morning, i'll take the finance contract and rip it up. it is on us, mr. gordon. >> wow. >> we're going to give you the vehicle. >> that's -- >> celebration, number 9 million. >> wow. >> what a great guy. that's just -- that's classic. is that really 9 millionth guy or did you pick that -- how lucky are you? you're just stepping in it left and right, aren't you? that's perfect. he's 92, buying a ford. that's perfect. >> ford f-150, the best-selling truck in america and a small businessman that has optimism about the future. give all of us a lot of inspiration. >> like the construction industry. >> 92 is the new 60. >> i agree. we're using a lot of those metaphors. why do we keep doing that? >> we're all getting old, that's why. >> when is your birthday in. >> we think the same way, joe.

i'm still in february. 921 inspiration for me. >> all right. i saw the stock, that's a new high, right? new all time high. and i don't know, by accident i hit a monthly chart, just to make myself absolutely sick, because i'm talking about going back to a couple of years ago, do you remember the low, mike? you probably do, you were there. >> of course i do. in '08, '09, absolute depression in the auto industry. >> it was 4, right? >> the stock went down to $4 and something. i think at the time, the performance of the company through the auto depression, demonstrated the strength of our operating model and how we could perform, and on an operating basis we never lost money through the whole depression. and you combine that with what is a real recovery in automotive, we're still in the

early innings of, and going to go on for years, based on the performance of the company we now are at $49 a share. it has been a very rewarding period for our associates, and for our shareholders. >> and for -- and for wayne maybe. >> and our founder, our founder wayne is very proud of the company and what our 21,000 associates do across america every day to keep the country moving. >> all auto nation? how far along are you on converting all the names? getting there, right? >> that is done, joe. we completed that in june. i went all across the country and met in every market with all our associates. and told them the reasons why we were doing it, and it has been well accepted, enthusiastically accepted by our associates and obviously by our customers as we continue to set all time records

in performance. >> i was starting to say that wonder if wayne's ears were burning earlier this week, whether you saw. we had a guy, we got a new reality star on at night that does "the profit," gives some money. you probably know the guy. you know marcus lemonis, he said he knew berard and wayne. and he knew how to buy the local places and roll them up. now he's our big star on "the profit," at night. >> well, i have to admit, joe, watching reality tv shows at night is not my -- >> whoa, whoa, whoa, whoa. don't. that's the wrong answer. this one is different. >> i'm sorry. i just -- okay. this one is different. i'll check it out, joe. >> okay, good. but you know berard, right? he was there before you, right? >> yes, he was. wayne and steve were right there

at the very beginning and i came about 13 years ago. and been a great journey. we're far from done. >> all right. how often are you going to give out a car, maybe take another 9 million, huh? >> well, when we hit $10 million, we'll give away another vehicle. if you want to get a calendar out and watch our monthly sales closely, maybe you can figure it out and it can be you, joe. maybe it could be you. >> yeah, but that would be like that guy on the commercial, let someone go ahead of me, i'm doing something and the balloons

come down and they look over. >> coming up, the bright side of economics, roger altman, big story on the economy and this week's issue of time magazine, going to tell us why the economy is about to pop in a re good way. we're also going to be talking to the analyst that says time warner should inflict maximum pain on cbs and its cable war. check out shares of cbs trading at an all time high right now. 54.88. [ male announcer ] come to the golden opportunity sales event to experience the precision handling of the lexus performance vehicles, including the gs and all-new is. ♪ this is the pursuit of pection.

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. welcome back, everybody. as you can see, the futures are barely budging. everybody is waiting for that big jobs report coming out in two-and-a-half hours. 8:30 eastern. that's the time for the government jobs report. that's what the market seems to be waiting in anticipation of. when we come back, we have more on that report and what it means for all those bulls out there. the dow stampedeing to record levels. will the numbers at 8:30 eastern change the fed taper plans? two of the nation's top economists will join us to give their tale of the taper right after this. .

. >> good morning, everybody. welcome back to "squawk box" here on cnbc. i'm becky quick and the futures, things are barely moving right now. nobody wants to make a bet ahead of the big jobs report. is the focus. it's coming up in an hour-and-a-half. it's 7:00 already, coming up on an hour-and-a-half. >> we want good or bad. >> we don't know what we want this time. >> expectations. you want good. >> i asked becky, if it's under 160, you think the market sells off? yes.

>> yeah. >> i do. the stockmarket. >> yes. >> if it means the fed is not going to taper. >> good news is good news. bad news is bad news. >> no, i don't think so. we want both. i want to have my cake and eat it, too. i want the taper to go to december. >> well, i'm not sure. >> i agree to a lot of things. now you ask me to predict the stockmarket. >> we're not. >> sorry. >> anyway, let's tell you about our morning headlines, dell shareholders meet for the first time in texas to talk about that buyout bid. our david faber reports the talks are reporting between mike and silver lake special committee, which is seeking a better offer. the u.s. will be shutting down its embassies for one day on sunday. in muslim countries, this move comes after the state department became aware of what it terms an unspecified threat. officials say they are making a move out of an abundance of caution t. chinese court says johnson & johnson is guilty of

vertical monopoly, setting a minimal price for surgical sutures. china has been expanding alleged bribery, price fixing and misconduct by local companies. business groups say china is using its laws more aggressively against foreign companies than domestic ones. >> today aig instituted a quarterly dividend since 2008. i announced a $1 billion share buyback. second quarter earnings came in well above stills of 85 cents of revenues were short of consensus. it's jobs friday. can only mean one thing. we will be getting a preview of the data from mr. steve liesman. >> thank you, andrew. today i expect the conflict between the weak economy owner and markets expect job creation up still 183,000 amid-growth that is below 2% and was revised do unin the first quarter and the 4th quarter. here are the estimate, 183. guy, we checked this, you know

the latest estimates are like 187. we have not seen a wholesale upgrade at least from the wholesale economists who we follow. i think we checked 10 or 11 in the last day or so since adp. i guess these guys were comfortable where they are. the unemployment rate at 7.5%. as i would noerkts as becky did in the last hour, there is a whisper out there. unemployment rates down to 7.5% to 7.6. average hourly wages 10.2. is pretty much average. here are the good numbers going into this. they tell us the number could be good t. claims have been steady right around the range. the numbers have been eerily unchanged. 195, 199, 1 last numbers. ism strong yesterday. could be seasonal stuff in there. still the manufacturing sector seems to be bouncing back and the regional fed is good. here's the bad. just gdp 1.7. revised down, jobs follow

growth. so if those gdp numbers are right, you could expect a weakening. of course, the retail numbers also not very good. some of the things i'm looking for, obviously, the unemployment rate the participation rate. you could see that number tick up as the job market strengthens, hours work feeds into gdp earnings, of course. this issue of part-time is an interesting one where contradiction of the administration on the health care bill have suggested this is a number that is increasing because people are, employers are making their workers part-time to get around the health care act t. administration counters all of this as the sequester is a matter of defense department employees who were put on part-time work. that's what they have been putting out. i think personally, too much is made of one month's piece of data. this spike up in one month is not enough. eighth volatile number as you can see from the last graph, happy to make that call, if you have continued growth, part-time is a percentage of the total

that go up. >> it's a part of this thing to watch. part-time will be another thing we should be waiting for as a really interesting part of this. >> exactly. i think that's right. >> in addition to the participation rate. the total number and everything else. >> lots to look at. lots to dissect here. one of the things, as for the fed, it said it would end its purchases 7%. the street thinks it won't taper on average according to cnbc fed survey until the rate is 7.3% or lower. so we're just on the cuffs of a taper. >> so we could be, that could be the big surprise. it's moved .3 before. it probably won't. it probably won't. >> then we talk about why. >> i don't think you ought to make stockmarket calls. he's been wrong. the one thing he explains being wrong, he says the fed has inserted a wedge between the weak economy and where the stockmarket is. it's been, this wedge is going

in, which is giving the stockmarket, the lift more than, that's why i'm saying, if it's been the wedge that's gotten us here, when the wedge comes out, but there's two ways. but this could have come up. >> right. >> or this could come down or a combination. i guess what i'm saying maybe is that good news might be good news, but i still think bad news if its just semi, if it's not too hot, not too cold. >> let me ask you this. >> i want your jobs in qe2 in there suppose it's up 100? is that bad news? >> i think it's bad news, yeah. >> not too hot, not too cold. would be freezing cold, below 100, wouldn't it? >> yeah. >> i would say the economy is a problem, right? it's not doing what we think it's doing. >> the fed wants to get out. how much longer? >> that would show, too, it's not working. we want it to work a little. >> the fed wants to believe it's relative to when we implement the program. so there is a little

disagreement there, which is substantial improve him relative to what. if i take it relative to within i started the him practice, i think we were around 100,000 in september 12 when they started doing these things. >> now with the revisions, we were close to where we are now. >> that is true. the gdp growth accelerated. >> we got more. >> join us. >> i don't want to be here. >> from new york now, ubs investment research xheef economist obviously, he is here. who is more full of it here, maury? and who is the least full of it? have you taken sides? >> well, i think the economy is improving and, you know, we talked about some of the statistics so far. let's look at what the american public thinks is happening. you look at the consumer confidence survey. you spoke from the conference board and the university of michigan and the whole public is telling you that they were seeing better job conditions.

to me, that's really important. what's also important is that in the last few business sentiment surveys, business sentiment is picking up. so it's just not statistics. it's a mindset that's changing and i think that mindset has changed because there's not as much worry about the downside rick as there had been at the fed and in corporate board rooms. >> yeah. so hey, maury, i was reading your notes here, you are very optimistic. i think everyone is getting more opt mick to your point about confidence. what can go wrong with your forecast? i mean, what's the key threat to your outlook? >> well, i think the key threat right now would be what happens overseas. we got a difficult balancing act right now that europe is doing a little bit better. asia has been disappointing and if anything goes wrong, i think

it would be that we don't continue of that recovery in exports that we started to see in the second quarter. now, with that worry in mind, i felt good about the manufacturing numbers yesterday, because it showed that the export growth may have slowed somewhat, but it's still holding up okay. that's what i have my eye on as a potential risk. >> mark, when you look at this conflict between gdp and jobs, first of all, when you look at 200,000 jobs, what kind of gdp number do you expect that to come from? >> something closer over two. closer to two-and-a-half. so this is surprising, you are seeing this gap. >> and to you and maury, do you expect the gdp numbers to be revised? obviously the other thing that's happening, not only do we produce, we count the income side which has been stronger. there have been studies to show when have you this conflict, income wins. ultimately, gdp gets revised up.

is it a stronger economy? >> even a 0.4 which we had for the past two quarters. >> well, i was a bit surprised we didn't have enough for an upward revision for the data on wednesday. the benchmark revision. surprised me. i expected that. of course, these data will get revised again and again. i would expect upward revision. i would expect the jobs data, that gets revised, ultimately, that will get revised lower. the gap will close. here's the fundamental thing that's going on, i think the gdp is getting nailed by the sequester and government spending cuts. it's hitting the feds, particularly. this is a productive sector. >> i just read a report that really when you look at the number of government jobs that have been cut back, it's almost minimal, right? it's like 50,000 or something. the expectation was something like 600,000. >> it's the gap between gdp and jobs, the hint has been to gdp. it's nailed defense outlays, defense spending, very

productive. it doesn't hit employment very significantly. it might hit ours. so we'll see furloughs in the defense sector. we're not seeing lost -- >> paury, so the other part of the dual mandate is upwards focus on jobs. inflation. which way is the risk now? is it tilted towards -- worry about deflation? >> they added a new line that said that low inflation could pose a risk to economic growth for the first time. >> that would keep them in, right? >> that would tend to keep them in the game or allow them to maintain the gym longer. >> is it not unbelievable the size of the balance sheet now that it's still tilted towards. >> nothing has changed more in economic thinking than use of the size of the fed's balance sheet the potential of inflation. >> this is something -- >> becky, what i'd like to say -- >> we're not headed that way. >> the idea that eventually something bad will happen is not an dmik model. you can't say i am right about

what's happening now, i will eventually be proved right in the future. it doesn't work. >> you also can't say i have been right to this point, so i'm right forever. >> that's true. we got five or six years of a ballooned and bloated fed balance sheet and there is no at least measured inflation. i remain opened to another way of measuring inflation. >> but it's the people who know when to pivot that always get the -- >> the entire unit is -- >> rick santelli. >> the other way. >> paury, water your been on inflation? is it the deflation rick we should be worried about or do you think inflation will be more of an issue going down the road? >> here's what you got to keep your eye on is what's happening to your labor costs? you're not going to have deflation or much disinflation if your average rates are going up just over 2%. keep an eye on that number, because they picked up .4 of 1% in june. one month doesn't make for a new trends, but there's anecdotal evidence of tighter labor

markets in industries and areas of the country and i think the sign post for whether or not we have to worry about disinflation is going to be those average hourly earnings. you could also look at the employment cost index, a separate measure of labor cost that's running around 2% and my hunch is that a year from now, they're probably going to be closer to 2.5% and the fed and economists generally won't be as worried about the disinflation. >> wow. okay. so what are the other morning shows doing right now? do you think? so we have. >> i will debate. >> no, we have to watch. we got to watch the overall number. we got to watch the overall participation rate, the part-time workers rate t.eci -- how can -- do you think we'll get -- >> prior economic staff. >> do you think we'll get 100%? do you think they'll get zeros on the other big shows, the big

ones? >> matt lauer will put out the participation rate. it's ha ready to know. >> i would not want to be up against the participation rate. they are doing snowden right now. >> 55% think he's a whistle-blower not a traitor. >> ain't no place i'd rather be than right here, actually. >> he gets to stay. his sentence is a year there. you willingly spent seven years in russia. >> my father said, within i told him i was going to russia, he goes, why are you going there? your ancestors fled that country. that's what he said to me. >> that makes it much more ironic that you empractice is the ideology. >> i went there six months, stays six years. i never embraced the ideology. my kids think my wife and i are trained spies. that's what they think. when we don't want the kids to know what we're saying, we talk to each other in russian. >> we got to run, coming up next, what makes you happy?

it's the question of the morning. is it snuggly soft bunnies? maybe kittens, maybe puppies, maybe pretty flowers or a rainbow, how about the economy? it's time to look at the bright side of the commitment we're always so negative on this show. squawk market master will explain on the cover of "time" magazine, in the meantime, take a look at futures as we head to a break. .

a nice shot of the white house. it's time to look at the bright side of the economy, a big issue for "time" magazine, why the economy could pop, arguing the u.s. economy is coming back to life. take a look at the piece right there. roger altman joins us with more on the economic drivers. good morning. >> hi, andrew. >> so let's walk through it. this is the case for optimism. this is the bull case. i also want to get a take on whether this is a bull case for the marks as opoised to the real economy. this focuses on the real economy. let's go through the four main drivers. i'll let you start. >> let's set the stage for one

second. the.is the at least i think that the u.s. economy is in the process of turning a corner into a stronger growth period. we saw fed chairman bernanke talk a month ago or project, i should say, a growth rate for next year of three to 3.5% in real terms. i think we can have three years generally in that zone and i believe, andrew, that's what the stockmarket is primarily signaling now. there is so much talk why it is continuing to rise. the ten-year rate this morning, you guys were talking about it a few minutes ago, to 70. i think the market is signaling this stronger growth coming. after all, the market is an official leading indicator. what are the drivers? i think there are six of them, housing, energy, a revival of

consumer spending, lending, manufacturing, and technology. i think housing alone can add a half a point to gdp growth over each of the next three years. again, we're talking 14, 15, 16. energy, oil production was as low as 5 million barrels. it's now 7. it will be ten. we can do through them all, if you want. >> here's the one question i did have, it may take away from the piece. it was fascinating. you did layout a really interesting case for optimism for the country. but is it all relative meaning you make the case, the u.s. is poised to grow, but it's grow compared to everybody else who is not growing nearly as fast. is that, am i wrong in thinking that way? >> no, you are right in thinking that way. europe is going to be stagnant over this same period. i think china will continue to be strong, which is important. but among comparable countries,

you know, the industrialized world, the u.s. is going to stand out here. but for american citizens, i think that's the key thing. we are going to see improved labor markets. that's important. bernanke talked about the unemployment rate going from 6.7 to 6.5 net zone the end of next year. i think it will be a good period for the united states. >> let's get into the other debate of the morning, i'm sure you have an impact on. it may impact depending on how things are handled, three or four years ago when we judge it, who will be our next fed chair. i don't know if you saw brad delong come out in favor of larry summers. paul crudman came out in favor of miss yellen. where do you come out? you can't say you love both. >> but he can. >> i promise you that won't be my conclusion. but i do want to say i think the president has the luxury of choice here.

because i'm fortunate enough to know both janet yellen and larry summers. i think they're both enormously qualified. i mean that. but, if you look back over the last 35 years of global financial history, what do you see? you see a series of big and increasingly frequent financial crises and the.is the increasingly frequent. most people forget how many there have been. the dollar crisis of the late '70s, the snl crisis in the ''80s. the russian debt collapse. the mexican collapse. the latin american debt crisis. the asian financial crisis and good knows the 2008 financial collapse. now the euro zone sovereign debt and banking crisis. what is the message of that to the white house? the message is you have 3.5 years to go. it's 50-50 or something like that that you will face another

one before you leave officer. if you do, given the increasing power of these crises, it could threaten the president's legacy. so. >> you lean towards -- >> my top criterion, once you've, everybody's agreed that all the other levels of competency are there and they certainly are in janet and if larry, would be the most battle-hardened veteran as it relates to these crises, because the fed is the major u.s. fire fighter. it's not the treasury. it's not the congress. we certainly saw that vividly in 2008. and i don't think there is a more battle-hardened veteran anywhere than larry summers. >> wow. >> yeah. >> larry summers has the endorsement. >> i was early on that. >> you are following me, roger. >> we have been agreeing so much lately. it's certainly nice. >> certainly, joe is certainly on the music. >> yeah. >> roger, thank you for being clear with that endorsement. i was curious. >> i agree, completely.

you can be flexible. you just can't be bernanke for the next ten years. >> i agree with you. my question, do you think, steve liesman was suggesting, do you think that president obama has made a mistake in how this whole situation has been handled in terms of how political this has got, in termsf how public the debate over who is going to take this role in terms of the timing of it all? >> well, the public nature of the debate is surprising, but i don't think president obama created that. i think it's the result of some powerful forces in terms of those who favor janet and those who favor larry. and it was very interesting to me to see the president's comments on the hill as reported back by those who attended, defending larry and talking about the degree to which he's not close to a decision. >> roger, it's the far left

socialists in your party that, the haters, that started this whole thing. i mean, just because he doesn't want for the put the banks out of business -- >> all right. we got to go. roger, thank you for being opt mick this morning and -- >> and for being clear. thank you. >> see you later. >> and for giving the right pick. coming up, a special delivery from the u.s. postal service. we got only booze news ahead of the weekend. cbs and time warner cable, the battle over transmission fees continue. >> too bad you don't own distribution an content. >> meantime, both stocks hit new highs yesterday. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪

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hold two, four, six bottles and ship for a flat rate anywhere in the country. >> that was this morning in makeup. >> "squawk box" somewhere. you got to start early on a friday. >> "squawk box" has us on a loop. i was losing my hair back then, you could see it right there. >> yummy. >> beer. i'll be back. >> found liable for fraud in a complex mortgage deal that cost investors a billion dollars. the details are next ♪ then the battle over retransmission fees could come to a head today. it's saying that for a while. we will talk cbs, time warner and all things media in just a little bit with rich greenfield. t and choose from one of five lexus hybrids that's right for you, including the lexus es and ct hybrids. ♪ this is the pursuit of perfection.

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. >> welcome back, everybody. in our headlines this morning, we are just an hour away from that widely anticipated july jobs report. the street is on hold ahead of that. the futures barely budge. consensus estimates call for 183,000 new non-farm jobs. some raised the strong numbers

earlier this week from adp and the ism. the unemployment rate is expected to drop to 7.5%. it may get less tension than usual because of the jobs report. the government is also out with june spending and income figures an hour from now. both those numbers are expected to increase half a percent. look at shares of linkedin this morning. the professional network beat estimates of 7 cents, 38 cents a share and added 20 million more registered users during the quarter. is the biggest registered jump sense it went public more than two years ago. the jury found patrice liable. good morning to you. >> here's i want to read this to you. better markets, dennis callaher says this about the verdict. we can try to physical out what

it means. he says it is nothing for the sec to brag about, obscuring its record of failing to go after wall street executives, you would think the sec convicted the al capone of wall street when all it did is scape a trader who bragged in e-mails to his girlfriend. do you agree with that? disagree with that? >> i think it's somewhere in the middle. i think it's the anger people have against wall street per se. to convict all of wall street by basis of the result, of the economy is also not fair. we have a lot of bad business judgment that is monday morning quarterbacking. >> right. >> the prevailing view is this was not a strong case against fabreze. >> i would call eight 50-50 case. i don't know where it's going. >> did the defense make a mistake in resting its case. >> without the results. >> clear to you. >>? >> clear. >> and the implication of this win for the sec, goldman sachs,

for wall street at large what are we going to see as a result of this? >> there are two components of this looking at the case and the history. also i want to refer to a bad actors rule which goes into effect september 23rd of this year. looking at the case in a fact pattern, it means we can't go in there with huberis and say i'm going to go in there with the sec, fight it, there is no way i will settle it. people have to contemplate settlement as an option. september 23rd of this year, we have a bad actor's rule that guess into effect. it covers people and prohibitive acts. settlements, they need to be precluded from engaging a private offer, meaning hedge funds, private equity funds, venture capital funds, all go up on the radar as a career option depending on the result of these actions. >> what do you think will hap to fabrese? what type of -- is he going to

be banned from the industry? what is the fine going to look like? what do you imagine the upshot is? >> i would say with regard to penalties, i'm not sure. >> do you think goldman pays the penalties for him? >> that's a tough one. >> does that make sense to you? >> they have already paid for his defense. i don't necessarily know the terms of his employment i would imagine that would be one component they may be contractually obligated to him. i was going to say, banned for life i don't think necessarily is fair. i can side with people in the sense you read the e-mail. you look at many people's lives have been devastated by virtue of the economy. but he was a 28-year-old kid. he was given, in the position of some importance for a 28-year-old kid, but he was a 28-year-old kid nonetheless. so, mike, he received a temporary suspension, a year or two, banned for life i think is extreme as well. >> appealable case? would you want to appeal this case, if you could? do you think he has a strong

appeal? >> i don't know the strength of the appeal. that's not a flip decision. from what i'm reading, it doesn't seem like this will occur from the current reports. people warrick on conversations they've had with fabrice, plus it's functional, what does he want to do with his life? i have people i am friendly in the industry barred from life in their 50s who have regret they did not fight enough. at the time they figured they were going to come back into the business. ten years later, they wish they could and now they can't. >> while we have you here, can we talk about sec one sec? >> gary cohn from gold man saks said they were going to support sec as a client. you haven't seen other firms drop sec. why not? >> i think from what i'm being told, i assume everybody at this table is being toll, it's still business at usual at sac. i have not heard anything with regard to employees changeing their career paths,

counterparties are still conducting business with them. so it seems as if he's ready for a fight. >> and how long does that go on for? >> there's two actions, a criminal action against the corporatentties, a civil -- the administration action as i said last week, it's limited to 300 days from the date it was filed t. administrative law judge within 300 days is required to submit their initial ruling. so in that regard the famier to supervisors against steve cohn, we will havance answer. >> the new york times reported there is still a possibility the government could bring a separate case specifically against steve cohn criminally, do you believe they are still trying to bring that case? >> this is a case that may have legs. my impression has been for the last ten years, that there has been a target on steve cohn's back, whether right or wrong, i'm not here to comment on. but they have been through his, through everything i would think. i'd be shocked if he didn't pull up and see them going through

his garbage. >> and given the cases that they've brought so far, people said it's a weak case, the current case may be a strong case in terms of being able to win. people say it's a weak case. it's not the case. it's the al capone, on the tax evasion. are they trying to get. are they, do they have to build an iron clad case before they bring it against cohn, simply because of the media attention, how do you think about this? if you put your former sec hat oranges what's going on inside the room? >> well, whether on the sec or not, it's different. >> right. >> we want to know, you are taught in law school to know if answer to a question before you ask the question. so if i'm brick an action, i want to invest a lot of time an effort, let alone the reputation, i want to know if i have a high likelihood of winning the case. with regard to mr. cohn, fundamentally the sec is trying to drive him out of business an force him to become a family

officer an not deal with public's money. >> what's the lesson on the magnetic business cards as the ambulances drive by. in law school? >> fortunately, my law school, we never saw that class. >> flip them at the ambulance? >> you have been watching too many movies. you might have come up with a great marketing idea. >> i think that's been done. >> the town cars. >> yeah, exactly. coming up, a deadline looms in a major cable war. we will talk to the analysts that said that time warner cable should in his words go dark and inflict maximum pain on cbs. hasn't been working, though the content guys are winning. then it's back to school. not back to work for millions of teens and college students. a closer look at unemployment and its impact on retailers. "squawk box" will be right back. .

. >> quell come back. a quarterly profit of $1.29 share of revenue was above the estimate. viewia com added to the share

buy back problem a. slow grower and the fast grower. the deadline for an agreement in the ongoing fight between cbs and time warner cable is today at 5:00 p.m. eastern time. at least that's the latest deadline. meantime, shares of both companies traded at multi-year highs yesterday. joining us from new york is rich greenfield, rich, this has been an unbelievable battle. the deadline keeps moving. things have gotten heated. time warner started pulling the signals at one point and reversed course pretty abruptly. behind the scenes, it's been more heated. who is on top at this point? >> i think in these cases there is no doubt at the end of the day, time warner charges a lot of money to consumers. they have to have cbs programming. the question is at what price are they going to pay for what they call retransmission consent. the right to tremendous

retransmit the signal in new york, l.a. an dallas, i think the real thing to focus on, becky, this is the middle of summer. this is not your normal time. usually, it's the end of the 84. the jets are on on cbs. right now, there is like nothing on cbs. so it seems like this is a unique point in time. for time warner to take a much harder line than they do in these battles. >> at this point they're at war with time warner. that's what he said when they first starting pulling the signals the other day. this is a massive, massive battle. ultimately, do you think the tide has changed? do you think the cable companies will start to push back? or is this a one off event because of the timing? >> i think what's interesting is les mun ez was pulled to the side about that quote we're at war with time warner, then it was cbs that called up and actually tried to diffuse the

situation. i'm not sure what the offer was or how the offer changed. what really surprises me is time warner didn't put more pressure on them to come to a better agreement right away. remember the key here is will is nothing on cbs. so the closer you get to september, mid-september when the fall lineup comes back the same thing you have with nbc, when the lineup comes back on cbs and football starts, you can't be dark. >> was this a bad negotiation in terms of allowing the contract, was cbs wrong when they negotiated the agree agreement right now? >> it certainly is an odd time to allow your contract to lapse. it doesn't seem to benefit cbs. the real question to the point you were asking about is why in the world would time warner not have get their foot on les munoz's neck and play the out as hard as they could. maybe they will. we absolutely see another drop. >> that is still the nuclear

option, rich. taupt take off not only your partners over the long term but especially your customer was are at home and wondering what's going on. you are telling me to go get an antenna a few weeks while you settle this. makes me not happy with time warner. >> it does. on the other hand, your bill keeps going up. at some point, i don't know if you listened to the direct tv conference call yesterday, there is a point this starts to break. the bundles get bigger and bigger and more expensive. each broadcast network, nbc, abc, fox, uni56, all as you get to 2020 want to be paid upwards of $2 per person or per household per month. that's a $12 billion annual free caused for over the air free broadcasting. that's a challenge for consumetories digest over the next several years. >> that's the same cry we have heard for years. you think this is different at this point? >> i think what's different is the timebling of this battle. then also the technology.

there is technology in your own home at no costs. you don't have to get that antenna you mentioned in your own home for free. for the next 30 days, you could be watching cbs on your tv, on your computer, your smart phone or your tablet, not have to go through the machinations you had to go through. >> i don't know who benefits from this. hurts cbs. does it also start to hurt time warner cable, maybe i physical out i don't need my cable provider? >> i would disagree with you. it hurts cbs in their retransmission and consent. from the standpoint of advertising, it is a big benefit. having antenna-based subscribers, allows cbs to reach people who don't pay for multi-channel tele56. it's not a total negative for cbs. your point on time warner cable is well taken. consumers will figure out they have more oranges areo combined with net flicks is a good value for let's call it $16 a month. i think you will see consumers

move in that direction. not tens of millions. i like watching espn and cnbc. >> i late to say this. if you are on the cable side, comcast now owns both, if are you a time warner cable, for example, or someone else in that game, john malone wants to go to some of the cable companies as well. it's a higher margin business to just be in the broadband internet business, right? meaning, did you actually care about having the channels or not? >> i think that is, you hit the nail on the head. this is where the future is going, john malone wants to roll up this industry. he sees that broadband is the most important thing in everyone's lives, the video business is not the business. that's the dirty little secret. it's the lowest margin business. broadband, they don't share the revenues with the content. it's not like yahoo or facebook get paid on the broadband side like this way cnbc gets paid by those for carrying their network. there is not cost to that

broadband business. >> then you become a utility. >> very profitable utility. >> that's okay. then one last question on areo. we caulk reo as it's a game changer. there is not a lot of people using it yet. how should we think about it? >> if you listen to brian roberts and les mun os there aren't a lot of people using it. if you see people doing and the interest there is, you can look on social networks. i think there is far more interest than management teams of the broadcasters actually admit to. . >> i thought i saw a number the other day about how many people are getting there, not getting it from cable. it's down to like single digits. isn't it? >> that's a broadcast, that means people with antennas. so across the country, there is roughly 14 million, 15 million homes that use antennas. >> yeah. it's like -- >> out of 115 million call it tv house holds in the country. areo is a new thing.

it's a small number, growing rammedly. >> even that 15 million number is paltry. >> you bogged my mine. the idea that a company like google could end up buying sports right f. they came in and bought the nfl or something like that, then the whole game changes. >> look, the sunday ticket. direct tv was asked about it. they have two years left. so the current season that's coming. one more season. that's it for their sunday ticket agreement. i are beginning that negotiation now. there is the wild card of, you know, look at yahoo, they're trying to be big in content. look at google. think about companies like apple. if somebody wants to make a big move, a contract like the sunday ticket would be a big deal for the internet. >> wow. >> all right. rich, thank you. >> thank you. >> cominging up, retailers, could they get hit this back-to-school seventeen? courtney reagan will tell us after the break. look at the futures around the flatline in terms of third value.

still are as we head towards the july jobs report and the wall street opening. "squawk box" will be right back. [ male announcer ] it's time. time to have new experiences with a familiar keyboard. to update our status without opening an app. to have all our messages in one place. to browse... and share... faster than ever. ♪ it's time to do everything better than before. the new blackberry q10.

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. >> welcome back, everybody. it's back-to-school season. some estimate the jobless rate for those teens and college-age students is more than double the unemployment rate of 7.6%. our courtney reagan joins us with more on struggling teens and the search for jobs. it is a tough job market out

there. >> it certainly is. unemployment remains at elevated levels. you all have been talking about it all morning. that's going to be an issue for both back-to-school spending and beyond that. the jobless rate for americans age 16 to 24 stands at 16.2% for june. that's more than double the overall unemployment rate that we saw. the center for american progress also estimates that means more than so million americans under the age of 25 are unable to find full-time work. 728,000 of them are teenagers enrolled in school also unable to find work, retailers catering to the group should be particularly concerned about the lost spending power. the center for american progress also estimates youth unemployment has cost the group $20 billion in lost wages since the recession. surveyed data shows that parents are contributing less for teen's discretionary spending for items like back-to-school apparel t. retail team surveys 5,200 teams

kwies a year. the most recent survey, both parents upper average income groups will be considering considerably less than the survey prior. that will be worrisome for retailers, knowing the teens will have trouble making up the difference without those after school or the summer jobs. but the issues go beyond problems for retailers selling the latest trends for back to school. moody's chief economist says the population of 15 to 19-year-olds has actually shrunk by half a percent from a year ago. so you've got a smaller group in general going to school, back to you, guys. >> courtney, we did have breaking fuse right now. david faber joins us from the new york stock exchange. david. >> thanks very much, becky. which can tell you at this point that dell's special committee, michael dell and silver lake has reached a few dole for the boyout t. new deal is thrown 75 and cash plus a special dividend that will be paid at closing of

13 cents a share and the guarantee of the third quarter dividend by dell computer as well. all of it adding up if you want to do the math, of course, there to what is it about 25 cents, yeah, 1398, something like that. you guy dos the math. i'm moving a little too fast here. of course, this has been a debate t. key part of this agreement, however, is the change in the voting standard. last night on "fast money," we told you that the two sides were working and progressing towards a dole focused on a higher bid from michael dell and silver laic that would allow or would result in the special committee changing the voting standard. what will the new standard be? well, yes votes will count as yes. no votes as no. non-votes will not count as no votes. it will simply be a majority of those votes cast to carry the day. this is expected, of course, to be a significant help to michael dell and silver lake in trying to take control of this company.

the new vote hasn't been scheduled yet. sources telling me expect a record date of mid-august. it may be a week or two from now. let's call it a couple of weeks roughly from now and a mid-september meeting, give or take a few days on either side of that. for its part, a special committee said no to $13.75, feels with the additional dividend, taking it to $13.88, the additional 8 cents as well that they have guaranteed now the dividend paid by the company in the third quarter that they felt it was appropriate to change the voting standard. they will claim, of course, they were able to rest another $350 million from dell and silver lake to get this dole done. that's for shareholders, not including michael dell as one of those shareholders. we'll see if it's enough to carry the day. it certainly should be for his part. one would expect carl icahn to commence litigation yesterday about trying to hold the special

meeting and the annual meeting at the same time. we will see if he gets an injunction here as well. they got the deal. you have to in some waysed a many it this almost felt orchestrated in the way it came down to the last moment. best and final 13.75. well, i guess not. >> okay. i got a lot of questions. david, we will maybe try to get back to you in the 8:00 hour and go through some of this. thank you. >> when we come back, it's the number of the month. we have great names to break down the dmik's advisers chairman austan goolsby is here. chief economist dick hoey will share his thoughts. "squawk box" will be right back. . and this will be your premium right here.

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>> down now to david faber, news on the new york stock exchange. we get back to you, david. >> it was a quick. >> it was, what's going on? >> you know, joe, this probably marks the end of this incredible battle that really did not get to the end with the proxy fight

between carl icahn and michael dell. to reiterate if news, which is yet to be announced, will be before the open to have trading this morning. dell's special committee and michael dell and silver lake have reached a new deal for the purchase of the computer maker by michael dell and his partner silver lake. $14.75 in cash, plus the special dividend of 13 cents at closing and the assurance that the 8 cent quarterly dividend paid by the company will be paid. in return, the special committee has said it will change the voting standard, by which now it will be a majority of those votes cast to carry the day. significantly enhances the chances that michael dell and silver lake will win this vote. vote expected to take place, let's call it mid-september at this point. we will get a specific date i assume later today in terms of the when the record date is. lith call that mid-august or so. record date having been moved from what had been june 3rd.

a lot of new shareholders in the stock as well. some took positions lower than here when we believed the principles were making the market believe this deal might actually break. they came out a number of times and said $13.75 is our best and final offer. the special dividend is actually being paid from the company os coiffeurs not their own. why was the special committee not willing to change a voting standard, willing to do so at what is $13.96. we'll see. really, $13.88 to be fair. they will simply say it was their judgment. they have the right under the business judgment rule to have done so. the delaware standard was as it was. however, nothing says they could not change it, in fact, couldn't have changed it for $13.75. both sides perhaps at the very end of the day i report it at 5:00 last night saying we can't let it go to a no vote. ensue with carl icahn, which he

mit be able to take control of the company and institute his capitalization plan. nothing to say shareholders won't have their opportunity to vote here. they will. it will simply be a yes or no up or down vote when it takes place. guys. >> david, two things to clarify, you alluded to it. the real price that a shareholder should think about in terms of compareing these offers now is $13.88 effectively or not, the $13.96. 8 cent dividend was expected beforehand, no? >> yes. although, there has been some question about whether they were going to take that. it was not a guarantee, andrew. now, this dole, interestingly, is not going to close until from what i'm hearing potentially the middle of october, which is a long way between now and then. are you right, andrew, there was an expectation certainly among some you still get paid that 8 cents. >> it was sort of built in. i wonder whether dell special committee is now using that sort

of optically to get their price to look as close to $14 as humanly possible. >> the number will be there 13.65 number say we go got an additional $350 million. that itself 14.88. not to 13.96. $350 million bucks out of silver lake and michael dell. >> is there any chance that carl icahn, he has been to court, somehow get some form of injunction or something that were to change the way the board has to deal with this from a legal standpoint? >> he can try to get an injunction, you can't get a change in the voting standard. delaware, this does not appear to be a case you could win based at least on what we have seen previously. >> i imagine we will be hearing a lot from carl in the next 24 hours as well on this. >> we may well. although, i have to admit, he probably thinks, ondrew, this is going to be extraordinarily tough for him at this point. >> ultimately, secretly, might

think this is a win for him. >> well, he is the man that got more money. without carl, you don't get 13.88. you get 13.65. >> david faber, thank you. right now, let's get a check on the equity markets. things have barely budged. they are barely budging because we have 24 many wants to go before we get the number from the government. jobs report is what the markets have been waiting for. of course, this comes after the markets have a banner day for the first trading day in august. it was up 128 points for the dow. is a record level that the dow closed at. also a record level for the s&p 500 t. nasdaq sitting at a 13-year high. we will see what happens as we get closer to that number. the ten-year is the other we have been watching closely. yield has picked up after yesterday's gains. this morning trading at 3.741%. gold prices have been down, around $26. back below $13 at $12.85. crude oil at this hour has come

back slightly. down about 30 cents to $107.59. with reless than a half hour away to the july jobs report. joining us right now with their outlooks and positions is steve liesman, cnbc economics reporter, dick hoey. austan goolsby joins us, a chairman and economics professor at the boots school of business. sze gentleman, let's go around the horn quickly, get your numbers you are expecting. mark, you were locking for a strong football based on what you saw on dp. >> i'm looking at 175. that was the consensus, adp was 200. you subtract 15 k for government. i'd be very surprised if we don't get a decent number. >> steve, how about you? >> north of 200, maybe 210. maybe the adp number, maybe stronger. i don't know what's going to happen to government employment. we haven't seen the kind of subtractions we were expecting from the sequester. maybe they don't show up.

>> diblg. >> about 200,000. i think if there is a surprise, it will be on the upside in the private sector. i think we're right at the inflexion point to three years at 3% growth. 3 for 3 is my outlook t. stockmarket is in a bull market. a bond market. it's in a bear market. it's all consistent with thing a sell rachlths i think we are right at that acceleration point right here. >> austrian. >> i have been listening to zandi for a few months, he has convinced me we will get the numbers picking up, a little over 200. maybe 202. i do think when you press a little harder, you know, it will probably be more, you will see more of this rise in temp workers, rise of part-time hiring as people are still not convinced this is permanent t.gdp football was better than we expected, but it was a pretty bad number. we're not growing that fast. >> although, if you look at what the market did yesterday, that was some telling moves, ploorl

with the ten year pushing higher with gold prices coming back down, equities pushing to record levels. it seems like this market at least is beginning to think that this may be the real deal at this point. do agree with that austan? >> i think they're getting more comfortable with it. but u until we actually start seeing the gdp numbers come in not as expected, better than average, i think we should all be a little circumspect. >> two of the latest indicators are the smashing and long-term interest rates and short-term interest rate. that is starting to widen. that's a leading economic indicator of growth. i think you are right the markets are convincingly convinced this is for real. >> if you try to make the right investment decision, you can't wait for the indicators to tell you. you have to have the correct forecast of the new news that is coming and i believe what's

occurred is that the market, the stockmarket has risen to new highs because it's realized that bernanke's policy has worked and we're facing i think another three years of economic expansion, 2014, 2015, 2016, which means you can price the stockmarket against where the profits will be in 2016, if we get three years at 3% growth, which is what i anticipated. >> austan, better than average, 1%, 1.5, that's really telling that guys, this administration, which you were a part of, that's the problem. you guys think 1.5% is the average gdp for this country. >> no, i just told you that the growth has not been good. >> you said we got to get the gdp better, not just better than expectations but better then average, imply wack we have been seeing was the average long-term growth for this country. well, fella, it's not, my

friend, just a much bet ev. just because you are satisfied. >> what did you feed this guy for breakfast? >> i just said exactly. >> i justing will for, i don't know what it is. >> you repeated with what i said and said you dsd agreed with it. >> average? 1.5 is average for you poo em? >> we came in at a number. >> this country historic am. go back to reagan. this country does a lot better than 1.5. >> what is it? what is potential, austan? what itself the economy's potential? what is average. >> i think potential is back 3.5%. i don't think anything happens at potential and so i want to see us get to 3s. >> 3.51. >> give me 2.5. >> sorry. 2.5. i think to get book to the potential, we would need to get above the average of 2.5 to something like 3, 3.5 to pull us back onto the old line we were

on. >> how does that happen? >> all of these have the same number, when he misspoke, esaid, you don't mean 3.5, among the economists, we all know it was 2.5 even though he said 3.5. >> we are there now. >> you need a short period where the growth rate gets above the long-run trend of 2.5 to move us back to the old potential. >> if the sec shafal above 3.5%, does that qualify? >> 2.5. >> sorry. >> if the second half, let's say, is above 2.5, let's say it's 3 or something. is that enough to be good growth and get us back on the light rack? >> yeah, you will see the unemployment rate coming down pretty significantly and people will be feeling a lot better if we have growth in the 3% range. >> austan, when larry becomes a fed chairman, would he be less aggressive with quantitative easing or more aggressive in your opinion, right around what

bernanke is doing? >> if it were larry, nobody truly knows the answer to that. i think in the short run, there was a misinterpretation. when they quote his skepticism about the effectiveness of qe, i think he was coming at it from the other side saying that's why we need more fiscal stimulus. he wasn't saying, well, the economy is better than people think. so i think in the short run, he'd probably be doing the same thing. >> where do you come? >> we had roger altman here tell us just the other day, just a few minutes ago, that he thinks larry is the best choice. what about you? >> look, this is the president's pick. i think now they're saying. >> not apparently, austan, apparently everybody has -- >> i expect the list lob longer than that. >> hold on one moment. we have breaking news, mary johnson is standing by. she has blaking news on aig. mary. >> becky the conference call from the company's better than expected earnings taking place as we speak the ceo addressing

one issue, that being the sale of ilfc, its aircraft leasing company. he says we continue to negotiate with the buyers. remember, will is a chinese consortium that spent $14 billion for this company. however, aig has not received the money on a deadline of july 31st. so while they continue to negotiate, they are expecting or planning right now for an ipo of ilfc in the fall. so in the event the deal doesn't go through, he says there is a chance it could go through. if it doesn't, they are planning on an ipo. he said, of course the deal is complicated. you are dealing with a number of groums. that's why the negotiations have continued to run past certain deadlines. once again, aig saying they are planning at least for now an ipo of ilfc later in the year if this deal doesn't go through. back to you, guys.

>> a crazy story, you would have thought they would have had this deal locked up. it didn't happen anyway. coming up, the jobs report, take a look right now the labor clock is ticking down, minutes away from the july employment report. we are coming back with a lot more. looking at covered call strategies to generate income? with fidelity's options platform, we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens, and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. [ male announcer ] you wait all year for summer. ♪ this summer was definitely worth the wait. ♪ summer's best event from cadillac.

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welcome back, everybody. it is friday. means it's time for the weekend and the latest edition of the talking squawk block. that's where you can see joe as the new head of the federal reserve. you can read about the week award. you can see joe and i starring in the new housewives of new jersey. go to kewaukee.cnbc.com. >> you look good in that hair. >> among the stories we are following this morning, there is another economic report out at 8:30 in addition to the jobs report. we will get figures expected to rise a half a percent. likely to be obscured, the latest earnings from dow component chevron, the oil giant expected to post a profit of

$2.97 a share. toyota reporting its quarterly profit doubled from a yeemplth it set calendar 2013 production targets of 10.1 million vehicles, which would be an industry record if it's able to achieve that total. joe. >> you were rushing to get to that news? >> i was not rushing. >> you said we were talking about our new jersey. >> i was told. >> who did that? >> from is a little person in the back of here. they told me. here's the way you do it. >> cut them off. see where you have it plugged in. >> just take it out? >> my favorite is that. >> mr. greco wants you to know he didn't say cut you off, he said get to the news. >> i think that was rough. >> that's tough. >> i don't even know who is talking anymore. >> it's the fill-ins here. next, final production,

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. >> welcome back to "squawk box." we have steve liesman on set, guest co-host, mark zandi is here, austan goolsby is here.

we haven't heard, though, we heard your number, rick santelli, though, live at the cme in chicago. you have a good track record. give us your number. >> my number is 233,000. i took what i thought would be a real number and considered jobs splitting and upped it by 40%. >> to get your take, is that good news? or is that good news, back news, if you are a mark participant? >> i know i'm balking into a buzz with that one. your view, sir. >> rick. >> well, i'll tell you what, my opinion is, it's not an interpretation of good news, bad news. the reality is the quality of jobs may not be there, but the perception of jobs is taking a toll on the psyche of the fixed income markets, which has already reached the tipping point that i think can be elusive to any type of further information on the taper. i think the process has begun.

it's a needed process. i don't believe that the federal reserve or any other course on the planet will be able slow it down. the only thing we will argue about is the higher interest rates time table. >> what would be considered bad news, rick, on the floor where you are? >> i think bad news would be to see the interest rate complex be stifled a bit. because i really do think this water balloon that we have been squeezing for the last five years is going to find a way to exert itself. the marketplace. i think good data for the economy is good data. but good data isn't just the splashy headlines. i think we need to dig deeper. i welcome mr. bernanke an steve and the fomc committee monitoring some of the internals much more judiciously with regard to employment because they have such a vested interest now in using that as whether you call eight threshold, an

inflexion point or an excuse to do qe. you can pick any of the three. >> i got a quick question of the taper for you guys. does the taper, does it matter what's going on politically in terms of whether it's larry summers or yellen or we have a pick? do we need a pick before the taper begins or ends? >> it's very unlikely. >> is that the time income this matter? >> i think it's very unlikely you get a pick before december 18th. will depend on the data, if the data are weak. i think the fed will follow through with their soft promise as they're guiding to us this guiding us to. that they shouldn't be giving us too many false signals. i think it's the data. >> why would you think that? >> i disagree. because i think it holds the cloud, the debate, the whole issue of how the market accepts or doesn't accept the beginning of the taper, whether bernanke is in charge at the moment that that happens. i think there is a lot of different opt cam issues around.

>> there is a way to think about this. the taper and the end of qe is a program in and of itself. and that you might want the next guy to own that program. and otherwise be in charge of it rather than putting in place. >> then you have to begin. >> a program that the other guy has to do. >> you are forcing his hand as you start tapering. >> here's right. here's the hand. we have taken all the hearts out. so you got to pay spades, whatever you want to call it. >> i think bernanke wants to graduate for quantitative easing before he leaves. >> with you originally. not on the other side. >> that's funny. i started where you are. i got to the other side. >> i think bernanke wants to start the process. as he smooths the way. >> let's say you are moody's.com. are you like, okay, we need to build a new building. but i'm leaving at ceo of moody's.com. not that you are. you know. >> generally. >> but so what i'm going to do, i'm going to wait until the next guy comes in, to make sure it's

the building -- >> i'm talking to the next. >> we got to go. we will get the numbers right after the break. >> did they tell you to do that again? >> he set this all up. >> the little voice that comes right in my ear. >> here we go, guys. we will have those numbers. we will be right back with the instant reaction. .ll them, the more i enjoy them. tdd#: 1-800-345-2550 so i'm always looking to take them up a notch or two. tdd#: 1-800-345-2550 and schwab really helps me step up my trading. tdd#: 1-800-345-2550 they've now put their most powerful platform, tdd#: 1-800-345-2550 streetsmart edge, in the cloud. tdd#: 1-800-345-2550 so i can use it on the web, where i trade from tdd#: 1-800-345-2550 most of the time. tdd#: 1-800-345-2550 which means i get schwab's most advanced tools tdd#: 1-800-345-2550 on whatever computer i'm on. tdd#: 1-800-345-2550 it's really taken my trading to the next level. tdd#: 1-800-345-2550 i've also got a dedicated team of schwab trading specialists. tdd#: 1-800-345-2550 they helped me set up my platform the way i wanted, tdd#: 1-800-345-2550 from the comfort of my home. tdd#: 1-800-345-2550 and we talked about ideas and strategies, one on one! tdd#: 1-800-345-2550 really gave my trading a boost. tdd#: 1-800-345-2550

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>> we are moments agree way from the release of the july jobs report ahead of the number. the dow futures have been flat for the entire session. hampton pearson joins us now from the la boar department with the numbers. hampton. >> up 162,000. july non-farm payrolls increase by just 162,000 jobs. the unemployment rate is 7.4%. average hourly earnings declined by pow 1 of a percent. that's 7.4% unemployment rate is the lowest since december 2008 t. decline in average hourly earnings is the first since october of last year. private sector job growth increased by 161,000. we did, of course, come in below the consensus forecast of 183,000. there were also significant

downward revisions, basically, may an june revised downward by a total of 26,000 jobs from what had been previously reported. job gains, retail trade, plus 47,000 food services leisure and hospitality, plus 38,000 professional and business services up 36,000. manufacturing was up just 6,000. construction was actually down by 6,000. the labor force participation rate stands at 63.4%, down a tick from 63.5 in june. the u-6 rate total unemployment if you will 14% down from 14.3% in june. 4.2 million or 37% of those unemployed have been out of work for six months or longer. back to you, guys. >> thanks, hampton. hey, liesman, remember the last jobs report we got? we got the number, itself, stayed up there to 7.4, whatever. we got this great number on how

many jobs we were at. wow, the public's not going to foe we're getting closer to the tapering point. but we got really good growth. this is the i dare say compact opposite where we got a crappy 163 but everybody is going to think 7.4. we're only one tick above where they start tapering. this is the worst of both worlds now. >> i find my zen in this world by dealing with things i can handle. our viewers, our "squawk box" viewers, our cnbc viewers are smart. they follow what we tell them. >> 7.4, they're going to taper eastern though we got 160 jobs. >> i think it's okay. it's not the end of the world. it's the threshold the becky quick threshold i call it. 160k. >> the market didn't know what to do, up 5, down 5. >> it's the case, we have a spring that says -- >> for somebody that's satisfied with crappy, really averages, it's probably great.

>> this is like block buster for austan. >> no, first of all, i listened to zandi again, whenever zandi convinces me to be optimistic the number comes in. >> i was at 185. >> the second thing, it's got to be that if you go get the household survey, it must show some bicker job gains. >> remember it fell by unemployed by 263. 263 jobs if you were unemployed. >> look at the labor participation rate again. -- >> the number went down -- >> i don't like it because it's 7.4, which is where we would taper. >> i'm sorry, this is red velvet cake. >> you want your cake and eat it, too. >> you get to eat it, too. >> i want job growth. i don't want the unemployment rate make the fed pull out. >> the market says it's the

maximum where the fed will taper. so if there is still one tick above. would be -- now the thing inexplicable to me is the government yagd jobs. i into ed to get that split. >> 7, 7, 300,000 jobs. it would be like we're no closer to tapering. we're really going gang busters. >> the other question is broadly, what makes sense about the federal reserve saying, we're going to do it precisely to this unemployment rate? i mean, as opposed to owe. >> it's a benchmark. >> but they're training the american public that the federal reserve has the power to put the unemployment rate wherever they want, 6, 5, 4. this is what they're trained. economists know that's not right. but they are training -- >> they're saying these are benchmarks, thresholds. >> they are training the public that easy mon tore policy is a free good. it just helps. it just gets more jobs. there is no cost to it. ultimately, i think it's a

mistake to be so specific on a narrow economic indicator as opposed to saying, we look at the breadth of the thing the way we use it. >> that time for economic reasons was unchanged 8.2 million. it didn't move up or down. >> households, what was that? >> come on, give mae second here. >> the reality here is we take last month's report. >> right. >> which is better than you thought. a little worse tan we thought. the reality is it's somewhere in between. >> 7.5. >> so the unemployment reached 7.5. payroll job gain is $175, 180. >> 7.5 is kind of average for our unemployment. >> it's falling half a point per annum. >> negotiate 5%. 7.5 is average for this administration, austan. >> i agreed with you, joe, it's been way too slow. nmg it gets faster, i'm still negative on the jobs number. >> i know you have been. you have been. i don't know what -- >> look at some of the moves,

gold is back above $1300. >> it thinks the fed is coming back. >> it thinks the fed is coming back. because the economy is not as strong as yesterday with all the strong numbers they got yesterday. the ten-year yield i think is back around 2.6%. so all of the -- remember, those were sharp moves yesterday. the market has kind of whipsawing back to like, okay, never mine, maybe the easy times and the great economic indicators are left. >> i got no cake and i can't eat it and i have no cake. >> in the face. >> i got a pie in the face. >> what does this do to growth market, andy? >> 4 was the hours worked. it came down a bit. >> aggregate hours worked would be on the soft side. >> it's sub2% gdp rate. >> can we take a vote, a delay in the taper?

are we going to keep the taper going? i'm gathering data. >> september. >> september. >> 2-1? >> odds are 62.3% in september. >> that's september. >> austrian, what's your number? your month? >> i think they do the least amount of taper that you could do. objectively, they won't do it, but i this i bernanke would like to -- >> 75 cents. they will go to 75 cents. >> i like that idea, austan, so it's a $10 billion taper in september. that would be the minimal, right, austan? >> yeah. >> i get confused, austan, mark, same thing. what would be your number for the taper? . >> i think it's 20-25 million. >> even? because -- >> no, that i this is the key thing. they got to keep long-term interest rates well anchored and only rising with the improve him

in the job market. the only way to do that is having these very clear thresholds. they don't have those thresholds, they lose control over the bond mark. so that's the key thing here i think for them. >> i think the long is 15 t. evidence will be somewhat ambiguous, enough for them to act. not enough -- i don't think they'll do 25. that's too strong a measure. >> i don't hear rick. i'd love to get a pulse of what's happening on the bond market. >> i love mr. zandi's comment. they need to keep this here. that's the problem. type of thinking is the problem t. word keep should never be in that sentence. they can keep the fed funds rate basically at serve, i wish you'd ask me when the taper worm was going to crawl. >> rick, wait, when is it going to taper, rick? when are they going to taper? >> the market's already doing it for them. what that do to me doesn't matter. it doesn't matter. >> let him finish. go ahead, rick, can you see the fed fund market there? what are they priceing now? >> the effective rate is 8 basis points.

you can't look at fed fund futures and pick it out. it's an arbitross trade. it's the next meeting gives us, once you have time to convergence change is there what's the number there? 14, 15? are they are the 50? >> fed fund futures are basically all the same price as far as the eye can see. to me, looking beyond two meetings, when we're at the zero interest rate policy shows that people just aren't aware of how arbitrage it works. >> water your number an month for tapering? a. >> i don't have a number for tapering. once again, steve, i think they are not going to be able to modify the mouse trap fast enough to catch the mouse that i call the real market. >> can i make a point? qe is the entire intent is to manage long-term interest rates. itself the way it works. they moved it down by design, by policy, they got to manage them back up so it's worldly and the

housing recovery. so this is about managing long-term interest rates. >> it's about manipulating long-term interest rates. if i manipulate securities prices, that's called a crime. if ben bernanke manipulates it, that's called long-term policy. what we have is a normalization of long-term interest rates from a manipulated price to a free market price and it's the detail of which month they actually withdraw that quantitative easing is a detail t. point is, we're going back to market the term, long-term interest rates after a period of manipulation by the federal reserve. >> no, manipulation is the wrong -- >> it's a manipulation. >> give that man an oscar. give him an oscar. mr. hoey. my hats off to you. >> the feds always managed short-2er8 interest rates. and it decided in order to help

the economy in greater buckets or in greater extent, it was going to manage or manipulate long-term rates. >> manipulate is a pejorative connotation. it's not. >> mark, excuse me. >> two question marks. a lot of times we see revisions and the direct revisions can help us determine the direction of job growth. these were downward revisions. not by a lot. they were 26. does it make you nervous, you have a weaker jobs number, you come down from this 995 number, now you are at 160. are we in a step downward revision of the job market? >> they're not consistent. each month they're up. sometimes the re56s are up, sometimes they're down. >> we're in a period of downward revisions in a row? >> last month -- >> may was revised downward and june with minor provisions. >> we have provisions. >> it's also occurring in a context in which the ism was

very strong. >> for people worried about the fed getting behind the curve, not raising rates quick enough. we dropped 14 basis points. the economy again said, you know, it doesn't matter whether you are accommodative. the economy doesn't warrant above 2.6 right now. it didn't say that? that's crappy. that was a crappy number to get a 7.4 and have the yield go down. >> context, joe what are we talking about? 1.5? weren't we ready tore 2.8? >> that's still pretty aggressive. what are you looking for a long-term yield? right, that would be a place where it would be what, 2% a long-term yield mark? >> that would be consistent. >> if you have 1%, 3% would be a healthy economy. 2.5 would be weak. somewhere in the middle. >> two years out, if we have nominal gdp growth, 2016, year going to go 5% ten years than we

are now. >> okay. >> i think so, too. >> they do want to morph it slowly back up. they want to work it slowly back up. >> the markets sucked a lot up early on. that was a big move they made. the market is seeing a lot of backing at that 260. >> 260 now seems low. >> it was 160. >> it now seems low. >> yesterday. >> this was like today we think the economy is great. tomorrow we think it's not. >> the bond market lasted 31 years. we are now in a band bear market. it will last a long time. >> do we know anything more than we knew 829? >> i have no case. >> this is a reset to wednesday. basically with reback to wednesday. >> all your great numbers. >> blah blah blah blah blah. forget about it. steve, rick, austan, thank you very much. mark and dick are sticking with us. >> it's kind of average. up next the nation's governor is taking on job

creation. we have delaware's governor joining us talking about how the states are taking on the jobs challenge. right now as we head to break, check out the futures. okay, a little worse offer than it was at 8:29. things were flatlining now t. dow futures can down by about 27 points. "squawk box" will be right back. . "first day of my life" by bright eyes you're not just looking for a house. you're looking for a place for your life to happen.

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. >> welcome back, everybody. the july jobs report released moments ago, show non-payrolls at 60,000.

that was below what the street was expecting. the whisper number was higher, up around the 200-plus. it came in as a surprise what is interesting is watching what happened to the futures since then. we were flatlined, right now you see weakness, s&p futures down throws to 3 points. what's more interesting is if you take a look at the other boards out there. gold bounced back up above $1,300 an ounce the ten year gave back the gains it made yesterday. the ten year is yielding somewhere around 2.6%. is well below the 2.74% we seen earlier this morning. a takedown is a do-over after yesterday's moves on many of these markets. also, shares of dell are on the rise this morning. our david faber reports a dell special committee struck a deal with michael dell. they will pay out $13.75 a share and a dividend. that deal is expected to be

announced officially soon. dow components kref ron earning $2.77 a share for the quarter. that was below the estimates, similar to what we saw yesterday with exxon mobile coming in well below the street's expectations. ceo cites crude oil an refined products, it's hit a lot of these oil companies. joe. the national governor os association meeting for a conference today in milwaukee, top of the agenda, job creation. joining us from the conference with more on this is delaware governor jack markell, also the chairman of the national governor's association. governor, it's been a while. it's good to see you. >> good morning, good to see you, too. >> normally, you are sitting right here. i guess you got to be governor and do all this other stuff. you can't be on tv all this time. you just heard, this jobs number, you got all the, you know, you got the bad stuff, which is the 7.4, on face value, it looks good, it may cause the

fed to maybe taper. but 160 is not what we need. what do we got do? >> i can tell you what we governors are doing, because we certainly feel we can't just wait for things to happen in washington, d.c. so one of the things that we do while we're here is learn from each other. whether it's about work force development, making sure that we're teaching kids in schools skills that are valued in the marketplace. one of the most frustrating conversations any governor can have is with an employer who says i'd love to hire, i got vacancies, i can't find people with the right skills. so we're very much focused on. that we are focused on promoting exports, there are lots of things governors can do and are doing. >> yeah. do you think it's still a, just a demand problem globally world wide that's causing it? i mean, there is only so much that you governors can do and obviously job creating is one thing, but it just teams seems to be something that is different about the way we're adding, you know, we're still

down how many jobs from the peak in 2007 or whatever it is? >> right. >> people called eight new normal. what do you attribute it to? >> i think there are a couple things. of course, your.is the without customers, are you not going to be having sales. i think there are a couple of other things going on as well. productivity gains had a huge impact on jobs. we have got employers in delaware who, today, are producing more than they ever produced before. but they have got half the number of employees they had ten years ago because of productivity gains. that's number one. and number two, businesses have more choices than they have ever had before about where to expand, where to invest, where to hire. in recent months i've been to israel, to india, korea, japan. and it is incredible when you drive through -- when you're going through those countries or others how many multinational companies are investing there. 25 years ago, those investments by necessity would have been in the u.s. or western europe. but now there say great workforce, you know, pretty much

all over the world. i think that's an incredibly important wake-up call for us to have in the u.s. >> what are tax revenues like? do you get any sense they're accelerating? any insight on the economy by looking at your revenues and the revenues of other states? >> i would say it has been growing, but not been growing at the pace we would all like it to see. in fact, as long as there is one delawaren not working and wants to be, we have more work to do. i think i know that in delaware and across the country governors wake up every day saying what is it we can do? we don't create jobs. what we do is we can create the kind of economic environment, nurturing environment. >> you can control your state, and delaware is obviously a private sector friendly in a lot of ways. now we hear, you made the case for some type of corporate tax reform by citing how many places may be more attractive to hire workers. so we get a proposal and we see harry reid say unless there is huge increases in the revenues

we collect, we're not doing any corporate tax reform. are you behind what you see coming out of both parties in washington, governor? >> i think, number one, the president's proposal on corporate tax reform makes sense. i also think it is important for us to recognize. a lot of times companies are making decisions to invest elsewhere. it is not just tax driven. sometimes it is tax driven, we have to understand that. other times it is more workforce driven. the fact is these days there are lots of companies and countries around the world which have invested really significantly in education, workforce development, and the like, and when i talk to ceos, that's the number one issue. that generally ranks even higher than taxes. >> if jobs is the answer, then the question becomes if in two or three years from now this gets passed, we don't see a huge jump in job growth as a result in part because of this, and you don't see an increase in tax revenue, where do you think you get left? that is clearly the worry among some in d.c. >> well, i think what we have to

do, you know, the states, 49 of the 50 states have requirement to balance our budgets. what we have to do number one is make sure that we're spending the taxpayers' money really wisely, and because -- and we have to recognize we're not going to be able to cut our way out to prosperity, though we do have to cut where we can. we can't tax our way to prosperity. the only way out is to grow our way out. i think everything we focus on in the states of washington, d.c. ought to be what is the growth strategy. that's really the only thing that matters these days. >> that would be -- a good idea. big change, obviously. big shift from the last couple of years. governor, we appreciate your time. thanks. coming up, we'll talk about viacom and all those reporting quarterly results this morning and find out if those stocks are on the move ahead of the opening bell. ey mike.what are you up to? oh, just diagramming this accident with my state farm pocket agent app. you can also get a quote and pay your premium with this thing. i thought state farm didn't have all those apps? where did you hear that? the internet. and you believed it? yeah. they can't put anything on the internet that isn't true. where did you hear that? [ both ] the internet. oh look. here comes my date.

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welcome back to "squawk box." viacom one of the big movers. reported third quarter profit of $1.29 per share. investors paying more attention to a doubling of the company's stock buyback program as well as better than expected revenues. coming up next, we'll get the last word from our guest host when we return. y sales event and experience the connectivity of the available lexus enform, including the es and rx.

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new jersey." >> i got out of a lot of things here. >> you can go to squawk.cnbc.com to check out the blog. a pleasure having you both here, mark and dick. you have a fantastic weekend, everybody. >> let dick say something, go on another anti-fed rant, i'm afraid. make sure you join us on monday. "squawk on the street" is next. >> good friday morning. welcome to "squawk on the street." the july employment number is a miss. 162,000 jobs added last month. that is the lowest since march. may and june payrolls revised lower. the unemployment rate falling to 7.4, that's a 4 1/2 year low. hourly earnings dipped last month. we got to 2.74 prior to the number. now down below 2.62. t